Mine owner fighting Utah over water treatment

AP News
Posted: Oct 27, 2010 12:48 PM
Mine owner fighting Utah over water treatment

In the months after a Utah mine collapsed, entombing six miners and three would-be rescuers, the coal mine filled with groundwater that continues to pour out.

Now, Utah regulators are trying to force the operator of Crandall Canyon to guarantee that treatment of the contaminated water will continue in perpetuity if the company abandons the mine.

Genwal Resources Inc., an affiliate of Murray Energy Corp., is fighting the demand.

The Pepper Pike, Ohio-based company argues it is successfully cleaning up the iron-rich water, hasn't formally abandoned Crandall Canyon, and shouldn't have to post a performance bond.

"The division's demand for perpetual funding by an operator of mine water treatment in an active coal mine is unprecedented in Utah," Genwal attorney Denise A. Dragoo said in a Sept. 15 appeal to the Utah Board of Oil, Gas & Mining. "Other operators in this state confronting contaminated mine water drainage have been permitted to provide for treatment as part of their normal operations plan."

The Utah Board of Oil, Gas & Mining on Wednesday was considering a months-long hearings schedule to resolve the latest fallout from Crandall Canyon, where six miners died in an August 2007 collapse so powerful that it initially registered as a 3.9-magnitude earthquake.

Another cave-in 10 days later killed three members of a rescue team. The operation was called off after drilling into the mountain found no sign of the trapped men. Their bodies remain deep in the mine's catacombs, a tragedy unlike the successful rescue of 33 trapped miners in Chile weeks ago.

Pleadings filed by the company with the mining oversight board say Genwal is meeting its obligations by spending $325,000 a year to treat the discharged water. The company calculated it would have to pay $33 million into an interest-bearing account for perpetual care.

Murray Energy executives and a lawyer declined interview requests, but the company issued a brief statement to The Associated Press acknowledging it was challenging regulators' authority to demand a reclamation bond before the company gives up on Crandall Canyon.

The Utah case puts Murray Energy on the spot: Does it plan to return to mining at Crandall Canyon or not?

The company says operations at the central Utah mine have only temporarily ceased. It would have to do an expensive reclamation if it gave up its federal coal lease. The company is keeping those rights but hasn't divulged its plans.

By January 2008, groundwater drowned the sprawling Crandall Canyon mine complex and was spilling out at a rate of 500 to 1,000 gallons a minute from the mine's entrance portal, according to a report filed by state hydrologists at the Utah mining agency.

Another state agency handed the company a water-pollution citation when iron-rich water stained local creeks orange. Genwall resolved the complaint by installing retaining ponds to capture the discharge and equipment to strip the iron from the water.

Regulators say Genwal's efforts have been successful, while the company argues that elevated iron levels will dissipate in a few years _ a claim state regulators say is unverifiable.

"Crandall is one of those places where every turn has been complicated," said Steve Christiansen, a hydrologist at the Utah Division of Oil, Gas & Mining. "Every agency is involved."